Wednesday, July 9, 2008

An American bank run?

IndyMac depositors seek cash, comfort at Branches

IndyMac, one of America's biggest mortgage companies, announced yesterday that it is essentially shut to new business. It is selling its mortgage retail branches, and will not be issuing any more loans. They are also axing 3,800 jobs. IndyMac's share price reached a new low of $0.71 (from a high of $31.50 last year.) Now there are scattered reports coming in of an "elevated level of withdrawals" by depositors who are concerned about the safety of their money.

Posted by little professor @ 01:44 AM (740 views)
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5 thoughts on “An American bank run?

  • Over 97% off in a year – quite incredible

    It’s surprising how close to the bone these companies have been operating.

    I suppose share holders and directors aren’t rewarded for prudence.

    Perhaps it’s time for a re-think.

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  • cornishman says:

    What is even more worrying is that the major shareholders in these companies will include the pension funds. Their ‘worth’ will also be being decimated – at a time when the baby-boomers are all due to retire – and want to claim their pension…

    Look at how many times Prudential, for example, is a major shareholder in these UK firms that are suffering major share price collapse.

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  • America has thousands of small banks, it’s a different system to our narrow set of big players. Because there are so many they tend to fail more often, and it’s not such a big deal when they do.

    Have a look at this hopelessly optimistic website: http://mjperry.blogspot.com/2008/01/history-of-us-bank-failures.html
    “The U.S. banking system is probably stronger and more stable today than at any time in U.S. history.”

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  • drewster – ummm…yes, but Indymac is not a mom and pop operation like a lot of the savings and loans. Similarly, one couldn’t say that Bear and Lehman are small operations either…well, at least they weren’t small operations…something about how to make a small fortune…

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